POWERED BY MOMENTUM MEDIA
Report due on LRBA usage by SMSFs
The Council of Financial Regulators is due to provide a report on leverage and risk in the superannuation system after concerns about the prevalence of property in low-balance self-managed super funds (SMSFs)
The body was the co-ordinator for Australia’s main financial regulatory agencies with the objective to promote stability of the Australian financial system and support effective and efficient regulation.
In a quarterly update, the organisation said it had completed its review of leverage and risk in the super system with a focus on limited recourse borrowing arrangements (LRBAs).
These LRBAs allowed a fund to borrow to purchase as asset with the lender’s rights limited to that asset if the loan defaulted.
This had been conducted in conjunction with the Australian Taxation Office following a request by the Morrison Government.
An earlier report of the subject had been conducted in December 2019 with the report concluding, at the time, there were concerns about the prevalence of property as a main asset purchased under an LRBA by low-balance SMSFs with little investment diversification.
It recommended further monitoring to track the future growth of leverage and identify risks within the SMSF environment.
A report of the review’s findings would be provided “in the near future”.
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
Recommended for you
The impact of identity theft and its threat to superannuation savings were highlighted in a case that went before the Federal Court at the end of 2023.
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
